Bond fund exodus from SA well underway as credit rating teeters
JOHANNESBURG – South Africa’s struggle to safeguard its last investment grade credit rating has failed to convince the most credit-sensitive global investors and many active fund managers have already voted with their feet.
The precarious credit rating of the continent’s most industrialised nation was put back in play once again last month after the government issued a bleak mid-term budget statement that slashed the growth forecast and showed government debt racing to more than 70% of gross domestic product by 2023.
Days after, Moody’s kept South Africa teetering on the brink of junk by confirming its ‘Baa3’ rating – the lowest rung of investment grade – but revising the outlook to “negative”, opening a 12-18 month window in which a downgrade could be delivered. Fitch and S&P Global Ratings already relegated South Africa to “junk” in 2017.
Source: iol.co.za
